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The perennial last-minute negotiations over hosting the America’s Cup regatta in San Francisco have led to contractors for race organizers owing almost $460,000 in back wages and costs for dozens of workers, according to interviews and city documents.

The main hurdle was the first-ever city provision requiring that workers who set up temporary facilities, such as tents and bleachers, for the races be paid prevailing wage, essentially a union hourly rate plus the cost of benefits, city officials and the prime contractor said.

Prevailing wage is standard in public works construction projects, but not for private entities staging special events.

However, the final list of jobs covered under prevailing wage wasn’t decided until after the August and October 2012 America’s Cup World Series events had already been held. A list of 22 job types related to the events, including seven requiring prevailing wage, wasn’t shown to race organizers until Oct. 2, the day the second event began, according to a memorandum between all parties finalized last week.

“There was a lot of gray area,” said Mark Guelfi, president of Hartmann Studios, the America’s Cup Event Authority’s prime contractor for the events. “The prevailing-wage language was to be determined. They didn’t get that worked out until the week of Oct. 11 … I’m happy to pay whatever rates they want me to pay, but if they can’t give me a clear indication of who to pay, what do I do?”

Working out wages

Jane Sullivan, a city spokeswoman on the America’s Cup, acknowledged that the list of prevailing-wage jobs “hadn’t been completely clarified” at the time of the events, although there had been discussions.

“There was no road map,” Sullivan said. “It’s never been done before, and the last-minute nature of what happened last summer contributed to the situation. … We’ve got it all worked out now. That’s the happy part of the story.”

The agreement calls for the America’s Cup Event Authority, the arm of Oracle co-founder Larry Ellison’s sailing syndicate responsible for organizing the races, to pay prevailing wages on construction trade work, including erecting and dismantling temporary structures and dealing with audiovisual equipment.

Any contractors or subcontractors must also pay prevailing wages for that work. Race organizers initially agreed to pay the prevailing wage when the host agreement included allowing the authority to develop the publicly owned Piers 30-32 just south of the Bay Bridge.

After the development portion of the deal fell apart, organizers still kept prevailing wage in the deal for work that would be done on temporary race facilities.

“We’re trying to do the right thing here,” said Stephen Barclay, CEO of the event authority. “We put it in our contracts. We didn’t have to do it in the first place, but we decided we would.”

At two preliminary race events last year, eight subcontractors did not pay prevailing wages for 113 workers combined, who are owed more than $400,000 in back wages, according to an audit by the Office of Labor Standards Enforcement. Another $3,700 is owed for apprenticeship training, and almost $55,000 for the city’s enforcement costs.

In some instances, workers setting up bleachers were supposed to be paid $64.32 per hour but were paid as little $9 an hour, according to the audit.

Workers for another subcontractor were supposed to be paid the $64.32 hourly rate, but instead were paid $20 to $27 per hour and not paid overtime because the employer contended they had “agreed to no overtime pay in order to get the work,” the audit found.

The disclosure comes at a delicate time as the city is hurtling toward a July 4 start to host for the first time the qualifying matches for sailing’s oldest and most distinguished event, followed by the finals in September. Supervisor John Avalos is preparing to hold a hearing on Wednesday to examine whether the city will be on the hook for millions of dollars to put on the event as fundraising by a private group of civic leaders has lagged behind expectations. Fundraising, though, had kept pace with city spending until earlier this year.

Mayor Ed Lee has taken it upon himself to raise $20 million from corporate and philanthropic donors as part of the $34 million overall target to defray city costs and fundraising expenses.

The race, though, has shrunk from a projected 12 competitors to four. Attendance estimates, and with them, city costs, are also expected to be less, officials said.

Pleased with sales

Still, the event authority described brisk ticket sales, including 1,000 of 5,000 “season passes” selling in 48 hours for bleacher seats at all upcoming races at $1,000 each and selling 10 of 12 corporate waterfront “chalets” at $675,000 a pop.

“We’ve been overwhelmed by the reaction,” Barclay said.

Avalos, though, said the latest stumble regarding prevailing wage was symptomatic of a process where race organizers and supportive city leaders “just say what they want to say and then they don’t live up to their commitments.”

“They have failed miserably,” Avalos said. “It’s kind of a pattern with the America’s Cup.”

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John Coté has been part of The Chronicle's City Hall team for six years, covering two San Francisco mayoral administrations from lean times to the latest tech boom. He has written extensively about campaign finance, government ethics violations and political chicanery. He has also covered land use, lawsuits and elections galore -- sometimes all at once. (Consider the San Francisco 49ers' new stadium in Santa Clara or the Golden State Warriors' plan for a waterfront arena in San Francisco.) Prior to that he covered legal battles in state and federal court, breaking news, crime, hurricanes, wildfires, a dead hippo and other news that is just plain weird. He cut his teeth as a top reporter on the Laci Peterson case and knows his way around courthouses, capitals and back roads from Florida to California. He grew up in Parker, Colo., before it was consumed by suburban sprawl.